Is the debate over defense cuts getting 'hysterical'?

Chances are, the latest story or speech about the prospect of deep cuts in U.S. military spending has contained two things: The term "sequestration" and a very large number.

Well, maybe three things: a prediction along the lines of what Sen. Lindsey Graham, R-S.C., recently told an audience in Norfolk.

If the cuts happen, he warned, "you're going to have economic devastation that will follow you for decades."

The angst has been driven by job-loss figures that spell bad news for Hampton Roads, where 45 percent of the economy is tied to military or defense-related businesses.

But one noted analyst wonders if mammoth job-loss projections — based on economic models and driven by assumptions that might not pan out — are helping the debate or hurting it.

"We've got to stop being hysterical and get serious — that's where I am," said Peter W. Singer, director of the 21st Century Defense Initiative at The Brookings Institution.

His comments were echoed this week by a senior Republican on the House Armed Services Committee. Rep. Roscoe Bartlett, R-Md., told Politico that while sequestration would be hurtful, hurling around superlatives isn't getting both sides to the table.

"We need to stop dramatizing the thing," he said.

It will be bad, but...

A recent study commissioned by an aerospace industry trade group estimated that defense cuts would eliminate more than 1 million jobs nationwide by 2013 alone. Virginia's share would be 136,191 defense jobs – about 207,000 total when you counted cuts on the non-defense side.

The study has been widely quoted in news accounts, in warnings from elected officials like Graham, and in politicians who have used the figure in ads. All warn against the prospect of sequestration, would cut $1.2 trillion from defense and non-defense spending over the next decade. The process was triggered because a bipartisan congressional panel failed last year to strike a deal on deficit and debt reduction.

Singer isn't defending the idea of sequestration. He thinks it's a terrible idea. Nor is he saying that Virginians should be complacent about the issue. A defense-heavy state has a lot at stake.

If Congress fails to act and sequestration happens, "Virginia would be hammered," he said.

But with so many moving parts and variables, he said it does little good to toss around specific job-loss figures that are based on broad assumptions.

In a recent article for Brookings, he took aim at the study prepared for the Aerospace Industries Association by Stephen Fuller, an economist with George Mason University. It predicted 1.09 million job losses in defense nationwide and included the state-by-state breakdown listing the 136,191 figure for Virginia.

When the study came out, Fuller took pains to point out that his numbers weren't exact. The state figures were based on each state's dependence on federal funding and – lacking direction from Washington – it assumed the cuts would fall proportionally.

"It's a sign of vulnerability," Fuller told the Daily Press at the time. "The actual numbers could change a lot."

But that didn't stop the headlines — nor did it dissuade politicians from plugging the numbers as if they were spot-on predictions.

"Extreme prediction"

Singer sees problems with the numbers, both nationally and in Virginia. A recent report by Deloitte found that the defense and aerospace industry sustains about 3.53 million jobs – people who are directly employed by the industry and those whose jobs are sustained by defense businesses.

A job loss of 1.09 million would wipe out a third of that number by next year, which Singer called "an extreme prediction, to say the least."

Second, Singer looks at a prediction from defense giant Lockheed Martin that it may have to furlough as many as 10,000 workers if sequestration hits. Lockheed did the most defense business last year with $17 billion in contracts. The next highest contractor did $9 billion in business.

Beneath these two are many medium and smaller companies. If the largest is losing 10,000 jobs, and businesses below it are smaller by orders of magnitude, it is difficult to reach a projected 1.09 million jobs, he said.

Finally, assuming that cuts will fall proportionally is one method to devise state-by-state job cuts – except that there's no telling if the ax will fall that way.

"That's a way to approach it," Singer said, "but in the real world, things don't work out that way."

Virginia will be slammed if the military comes down hard on submarine construction and shipbuilding. If they take aim at the F-35 strike fighter, the states of Texas, California and Connecticut would take the hardest hit.

A clearer view

What would a "good" analysis look like?

In Singer's view, it would stress the uncertainty. It would lay out multiple scenarios.

"Then you talk about – here are the key drivers, the assumptions that have the most impact on where the cuts might fall," he said.